Canadian Payroll Reporter

8 Canadian HR Reporter, a Thomson Reuters business 2018 News February 2018 | CPR 'Uncover every rock to look for potential savings' said. "If the premier is picking a fight with anyone, it's Main Street." Options for employers Changes to compensation are never easy, but options do ex- ist for organizations expecting blows to the bottom line, ac- cording to Christie Ferguson, a human resources consultant at 1 Stop HR in Ayr, Ont. "My advice wouldn't be blan- ket across the board," she said. "It depends on the industry, be- cause sometimes the industry is able to be more creative than others and clamp down on dif- ferent things in order to save some money without there be- ing as much of an impact on the recruiting side or the retention side. We have some employers who are doing layoffs, or raising their prices, or looking at reduc- ing management numbers, so that they reduce a higher salary." Additional choices could in- clude salary freezes, clamping down on overtime — for exam- ple, only permitting it if preap- proved — contracting out ser- vices such as human resources, altering health benefit frame- works, or reducing workplace perks such as team-building, RRSP contributions or top-ups, said Ferguson. "Those are things you can look at. If you've got all kinds of opportunity to recruit employ- ees… then it's a risk you may be willing to take," she said. "But it's a double-edged sword, where all of a sudden you get into em- ployee morale issues… it goes all against the advice that us in the HR world are really advising our clients to do, and what we've been advising forever." Consideration of long-term impact is critical, said Fergu- son, as each decision on com- pensation is sure to send waves through the organization. "We're saying to our clients: 'All of your policies and practices need to be reviewed, and really think everything through before you make a change,'" she said. "'Brainstorm. Think outside of the box long-term as well as short-term. Don't act too quickly if you don't have to... Really take your time as much as you can. Get some professional advice where need be.'" With retention in mind, em- ployers may want to award wage increases to valued employers earlier, said Ferguson. "If you look at the fact that it may be more difficult to replace those roles, then people are making that decision to increase a bit," she said. Wage compression experi- enced by those making slightly higher than minimum wage is part of the ripple effect employ- ers face in these situations, as those workers may also require a pay raise, said Janet Salopek, president of Salopek and As- sociates, an HR consultancy in Calgary. "We need to have a spread, in order to be fair and equitable, between the employee level and the next level up," she said. "It has that cascading effect… It also has a huge impact on your overtime — it's not just that hourly rate." HR practitioners at small or medium-sized businesses need to encourage calm, strategic deci- sions on this issue, said Salopek. "There's not a golden nug- get," she said. "Think it through, pause, take time and do your homework. Check with your peers within the sector that you're in… take your time to look at some alternatives and to plan. Think about the long- term impact that you're going to make, relative to the changes that you have to do because of the increase." "Don't just look at your labour costs. Look at your whole busi- ness costs. Uncover every rock to look for potential savings." And if a reduction to employ- ee benefits or perks remains the most effective option, "commu- nicate, communicate, commu- nicate," said Salopek. "If you have to make changes, take time to engage, and talk to your staff. Give them lots of no- tice," she said. "Engage your employees in what's important to them and what's not. If you're going to make cuts to your benefits, try to understand if there are aspects of your benefits that maybe your people aren't using, then cut there first... It doesn't need to be complex." Social media, legal risks Transparency and open com- munication can significantly aid an employer making altera- tions to pay grades, said Salopek. These are also a necessity in an age where social media allows individuals a platform to share workplace concerns. "Be transparent and fair when considering reducing labour costs, because it's the right thing to do, and all it takes is somebody to go on Facebook or do a tweet and it has such a negative impact on your value proposition, on your branding," she said. Not only could future recruit- ment prospects dampen as a re- sult, but litigation or employee unionization could also result if changes to compensation are too significant, said Salopek. "If you cut an employee's com- pensation… if you significantly reduce the compensation pack- age, you could face an allegation of constructively dismissing that employee," she said. All decisions on wages, ben- efits, bonuses, or reductions in hourly pay should be passed by a legal team prior to implementa- tion, said Salopek. from MINIMUM on page 3 Credit: Ontario Federation of Labour Protesters gathered at several Tim Hortons locations in Ontario in January after word spread that some franchisees were making cuts to employee benefits after the minimum wage hike.

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